A quiet Karnataka backwater has become the
epicentre for a denim jeans manufacturing
revolution, reports SANJANA from Bellary

POINT BLANK. Walker.
Nasty. Podium. These
are not just random
words in an English
dictionary. They are the names
of successful brands of denim
jeans, manufactured in Bellary,
north Karnataka. To the tune of
an estimated annual turnover of
Rs 150 crore. It’s a big sum for a
district labeled “one of the most
backward districts of the state”
on its own official web page.

Consider this: the 2001 census
pegged the total population
of Bellary at slightly over 3
lakh. A third of Bellary’s population,
over 1 lakh people, is
employed in the jeans manufacturing
industry. According
to the Human Development
report (2005) for Karnataka, Bellary
stood in the ninth position on the Income
Index for the state’s districts —
and the jeans industry is second only to
the mining sector in being the major
contributor to this development.

Jeans from Bellary are not just popular
in Karnataka: feeding the low to mid
range price segment, they are as sought
after in Andhra Pradesh, Tamil Nadu,
Kerala and Maharashtra. Priced 30-50
percent lower than premium international
brands such as Lee, Levis or
Wrangler, jeans from Bellary cost between
Rs 145-Rs 750 a pair.

Price is not the only reason for their
popularity: a major reason is the fact that
these manufacturers use similar quality
denim to that used by big tag brands. “We
source denim from the same manufacturing
mills as these premium brands and are
still able to offer a huge markdown on the
final pricing. because operations are outsourced.
High volumes also drive down
retail prices,” says Bharrani, a partner with
BB Brothers, the group that makes Point
Blank and Podium brands. Bharrani’s
firms is one of the few in Bellary that has
an export business footprint as well —
Point Blank reaches Australia under the
same brand name. In Europe and US
however, Point Blank jeans are sold under
the go-to-market brand name of Dragonfly.
In the Middle East, once again, they
are sold under a different brand name.

The different brand names are not just
market-driven strategies or ways to beat
export tax. They fit perfectly into the
extremely profitable retail industry logic.
Wholesale jeans manufacturers often
supply leading domestic and international
retailers with unbranded pairs,
which are then sold by retailers under
their own brand names. For a sizeable
profit, that is. On average, a pair of jeans
made in in Bellary costs Rs 350, while the
same paid in a store in Bangalore’s glitzy
malls is marked upwards of Rs 900.

Of course, no manufacturer will
divulge the names of retailers who buy in
Bellary. Ganesh Murthy, a purchasing
manager at one of Bangalore’s leading
one stop retail shops, is not surprised.
“We always sign non-disclosure agreements
with our suppliers. Who would
want to know that the jeans they are paying
huge amounts for were actually manufactured
in far-flung Bellary?” he asks.

There is a great deal of truth in that
statement. Bellary, despite its long history
of engagement with garment manufacture
(the town tailored uniforms for
the British), is stamped with the label of
not being ‘good enough’. Backward
Bellary cannot match quality standards
that customers expect from the brands
they buy in bigger metropolises.

Manufacturing units in and around
Bangalore cater to the GAP, Tommy
Hilfiger or Mexx, while Bellary’s units
are confined to providing products for
second rung brands. Admits Bharranii,
“Quality has always been a concern for
Bellary’s manufacturers. The ad-hoc
production and the lack of quality control
standards all add up. The required
amount of technology and capital investment
that abounds in Bangalore is
obviously missing in Bellary.”

The state government has mooted the
idea of establishing an Apparel Park to
boost Bellary’s units. The idea, first
proposed in 2001, is still at the notification
stage, pending final approval. Spread over
174 acres in Mundaragi and Guggarhatti
villages around the town, the proposed
park will cost the government Rs 27 crore.

While the park itself is yet to come up,
the bickering over how it will benefit
manufacturers has begun. “There might
be a promise of proper infrastructure
facilities but I doubt there will be many
takers. The cost of moving into the park,
along with the cost that we will incur to
shift all the workers there, will add up to
quite a bit. Besides, we survive through
outsourcing, something that will not be
possible if we move into the Park,” says
Mahesh Jain, a small-time trader.

THE OUTSOURCING that Jain refers to
is a distribution of the production
process — once the denim fabric
is received from the mills, it has be styled,
cut, stitched, dyed, ironed and then
packaged. The process involves multiple
players, none of whom are located under
a single roof. K Mohammed Shafi of
Donar Garments runs three units, with
50 machines, where the fabric is stitched.
“There are different machines — every
pair of jeans needs about eight different
machines and their cost ranges from Rs 2
lakh to Rs 18 lakh. Not many manufacturers
in Bellary can afford all this under
one roof. As an informal estimate, Shafi
figures there might be around 200 such
stitching units in Bellary — a figure that
does not include those who choose to
work out of their own homes.

What is interesting is that Bellary
became a jeans manufacturing hub
almost without assistance from the state
government. But traders agree that if this
backwater wants to leverage this to tap
overseas markets, this unassisted business
model will not work. •